The big issue concerning the P3 legislation in Michigan is lack of legislative oversight if the Bill is passed.
What it would mean is that the MDOT Director goes to a Governor appointed Commission to get approval for a deal. The Executive goes to the Executive in other words with no Legislative involvement.
Let's say it is for a P3 for the DRIC Bridge and the payments are "availability payments." That means that the State in on the hook for massive payments for the P3 investor that must be found out of tax revenues. The Legislature has the job to find the money and is the one who may have to cut other State services to pay for the gross profits of the P3 investor. OR raise taxes.
And the Legislature has NO choice otherwise there is a default.
We know now that MDOT bureaucrats are mere amateurs in major financial deals---Lord help Michiganders when the P3 investors get their claws into them. We know already that Canada was the one who thought up the scheme for the UP TO $550M riskless "free lunch" deal. Now we can assume who thought up the Plan to by-pass the Legislature on P3 deals and why.
Wall Street bankers and P3 investors must have been popping their champagne corks to toast her legacy as the Michigan Governor breathlessly helped sell out taxpayers last week at the House Committee meeting.
Canadian Parliamentarions have finally discovered the truth and are trying to undo what the Harper Government snuck past them. I hope that the Michigan Legislature wakes up before it is too late:
Parliament 'out of the loop' on gov't borrowing
By Kathryn May, Canwest News Service
May 3, 2010
Parliament unwittingly gave away its right to oversee billions of dollars in government borrowing, say a handful of senators who are fighting to undo a change they say was slipped by them.
The legislative change for Parliament to surrender its borrowing authority passed unnoticed by MPs and Senators in the 2007 budget bill. "The government now has the unconstrained authority to borrow whatever, whenever, at whatever rate, from whomever and for whatever purpose," says Liberal Senator Tommy Banks.
A fellow senator, Conservative Lowell Murray, has tried to undo the change in a private member's bill that died twice.
He's prepared to introduce the bill again, but first he's appealing to the Harper government to restore Parliament's borrowing authority out of its professed commitment to accountability.
Previously, when the government ran deficits, it had to bring a borrowing bill for any additional money to Parliament to explain its fiscal policies, said Murray. That's the way it was done for 140 years. "Now, we're cut out of the action," said Murray. "Parliament is out of the loop, and that is not where (it) should be."